Penningtons Manches' commerical dispute resolution team has been instructed on two significant group action litigation claims concerning negligent advice given by solicitors. One of the claims relates to the role of a London-based firm of solicitors transferring money as part of a 19 year Ponzi scheme, while the other concerns a large number of victims of a failed holiday development in Southern Italy.
A £1.2 million action has been brought against the solicitors Barrington Charles Edwards and Company which is alleged to have breached its fiduciary duty and client trust by making payments into third party accounts used in a South London Ponzi fraud that ran from 1991-2010. Rienzie ‘Joe’ Silva was found guilty of defrauding elderly investors in a Ponzi scheme from which he earned at least £4.3 million through his Croydon-based mortgage business Abbey Brokers. However, with Mr Silva's firm now insolvent, Barrington Charles Edwards is now being pursued by Penningtons Manches on behalf of 10 claimants for the actions of its partner, Gerald Scott.
Meanwhile, over 100 clients have instructed the team with regard to the widely reported Jewel of the Sea holiday development in the South of Italy. The project in the region of Calabria was abandoned in 2008 following police intervention over allegations of money laundering and, subsequently, many investors have been unable to claim back the initial deposits made to the lawyer Gabriele Giambrone.
Penningtons Manches is currently suing the struck off Italian lawyer, who took receipt of around 50% of the deposit payments. If successful in this action it is also then likely that separate proceedings will have to be commenced against Giambrone’s professional indemnity insurers, AIG UK, on the basis that the cover it provided is wider than the very restrictive basis it is now claiming. Unfortunately this will almost certainly mean many of the clients are potentially locked into litigation for years to come.
Partner David Niven, who is leading the team on both of these group actions, commented on the Giambrone case in an article in The Irish Sun today, 16 June: “The time has come for the solicitor’s insurer, AIG UK, to agree to pay these innocent people for their life-changing losses. Simply stating that there is no insurance money left to meet their claims because earlier settlement payments to other claimants have exhausted the available insurance pot is not good enough and is unnecessarily prolonging my clients’ agony.”